The cannabis-related social networking website MassRoots announced on Tuesday that its request to trade shares on the NASDAQ stock exchange.
MassRoots’s CEO and co-founder Isaac Dietrich received a phone call from a NASDAQ representative on Monday alerting him of the stock exchange’s decision. According to Dietrich, the representative said that NASDAQ’s decision was related to the federal ban on cannabis.
A spokesperson for NASDAQ on Tuesday declined to comment on the company’s decision. Dietrich cited the decision as a “dangerous precedent” that could provide cover for other stock exchanges to prohibit similar request by cannabis-related businesses.
This will have ripple effects across the entire industry, making it more difficult for cannabis enrepreneurs to raise capital and slow the progression of cannabis legalization in the United States.
This decision must not be allowed to stand and we’re asking every cannabis investor, business, activist and supporter to write a brief note to the Nasdaq in support of our appeal here.
Dietrich maintained that his company met the criteria for a successful NASDAQ application, which requires the meeting of certain thresholds for market caps and shareholders. He also lamented the idea that NASDAQ would reject the application put forward by MassRoots but would accept those offered by tobacco and alcohol companies, products that he deemed to be more harmful than cannabis.
MassRoots –marketed as a Facebook for cannabis users– announced that it will file an SEC 8-K form within four days of receiving a denial letter from NASDAQ, which MassRoots has also requested. Dietrich stated that NASDAQ informed him of his option to withdraw the application and keep the reason for denial private, an option he declined.
We want this to be made pbulic because it sets an important precedent.
In addition to the release of NASDAQ’s motivations, Dietrich said he will appeal the decision to NASDAQ’s Listing and Hearings Review Panel; should the board decline MassRoots’ appeal, Dietrich said he is likely to appeal the decision to the Securities and Exchange Commission (SEC).
Despite the setback, Dietrich remains sanguine about the future of his business and the cannabis industry as a whole.
In the cannabis industry, we face setbacks everday that other industries don’t face. But we move forward.
Do you agree with NASDAQ’s decision to reject MassRoots’ request? Why or why not? Tell us why on social media or in the comments below.